What to do When Foreclosure Hits Home

If you are struggling with foreclosure, knowing how many others are dealing with foreclosure is irrelevant.  What matters is how you can survive foreclosure and protect your family’s home.  So how can you fight the bank with they want to take your home back? 

Photo by Savva

You have options.

  • You can surrender your home.  Call your lender and let them know when you can vacate the property.  Sometimes the lender will help you with moving costs, if the foreclosure is new and there isn’t another lien behind the first mortgage.  You can ask your lender if they still offer a cash for keys program.  Some of the programs from a decade ago are expired, but asking is a good place to start.
  • You can ask your lender for mortgage assistance.  Let your lender or servicer know what the problem is, whether the issue is short or long term, and whether you can fix it.  Your lender needs to know in a one page letter, what happened, what you are doing to fix it, and what you need from the lender to get back on track.  If it still makes financial sense for the lender, they may work with you.  If you are in default of the mortgage loan agreement, the lender can reject a mortgage workout arrangement with you and may proceed to foreclosure.  Mortgage assistance may result in forbearance(temporary reduction or release from monthly payments), modification (change in terms of the note, either in repayment time, interest rate etc. that has been agreed to by all parties to the agreement.), temporary payment reduction with the arrears added onto the outstanding balance owed, higher payments over a short period to pay the past due amount over a period of time instead of in one lump sum or a reinstatement.  A reinstatement is full payment of the past due amount, including interest, to bring the account current.  People who are able to reinstate their mortgage usually have passed the financial emergency and have access to liquid funds to pay the mortgage company.
  • You can hire an attorney to re-negotiate your mortgage loan agreement for more sustainable terms.  When you signed your mortgage and note, you signed a legal agreement with your lender.  That allows you, or your attorney, to renegotiate the terms of that legal agreement. The renegotiated terms may be reflected in a reduction of your interest rate, an extension of the repayment period, a silent lien (a second mortgage that pays off the arrears on your first mortgage with no interest or monthly loan payments until the first mortgage is satisfied), forbearance or other arrangement.   Some people are great at negotiation, but unless you understand the language of law and of the financial industry, you may be at a disadvantage when it comes to renegotiating the terms of your mortgage loan.   Most attorneys will tell you to hire an attorney who has experience dealing with banks and lenders.  Knowing which attorneys have that experience can be a problem.  Connecting struggling homeowners with attorneys who represent borrowers, not the banks is what Wrongfullyforeclosed.com does.  Visit wrongfullyforeclosed.com to find out more about the services and costs available to you as you work to save your home from foreclosure.